Deere laying off 220 at Moline seeding plant

Deere & Co., the world's largest manufacturer of agricultural equipment, on Monday announced that 220 employees of its seeding and cylinder plant in Moline, Ill., will be laid off indefinitely effective Feb. 15, 2016.

The company said the layoffs reflect last week's forecast that agricultural machinery sales will decrease in fiscal year 2016. Deere said the action was taken to align the size of the manufacturing work force with market demand for products made at the Moline plant.

In the past, manufacturing employees at the John Deere Seeding and Cylinder plant have experienced seasonal layoffs in the spring and returned to work in the fall. Monday's announcement indicated there is no specific callback date.

Deere has furloughed about 1,500 workers, many of them in Cedar Falls-Waterloo. The company has attributed the layoffs to a weaker farm economy and a decline in demand for combines, tractors and other farm equipment.

Deere on Wednesday said it expects total equipment sales to drop about 11 percent in its first quarter, which began on Nov. 1, and fall about 7 percent for the fiscal year.

Deere holds a roughly 60 percent share of the U.S. farm equipment market and relies on the United States and Canada for the bulk of its sales and revenue.

Deere Chief Financial Officer Raj Kalathur told analysts on a conference call that while the company forecasts its third straight year of declines in sales of agricultural equipment, it also expects to remain 'solidly profitable.”

'We are forecasting a very healthy level of cash flow of over $2.5 billion in 2016,” Kalathur said. 'Our actions and proactively controlling expenses, costs, and managing assets have enabled us to deliver substantially better results than in any of the past downturns.”

The U.S. Department of Agriculture on Tuesday said it expected U.S. net farm income to decline to $55.9 billion in 2015 from $90.4 billion in 2014 after reaching historic highs in 2013. The agency's Economic Research Service cited lower crop and livestock receipts as the main drivers of the decline.